2. Forgiveness of Public Service Loans
It’s well known that navigating the Public Service Loan Forgiveness Program is challenging.
Former President George W. Bush signed the program into law in 2007, allowing government employees and specific non-profit organizations to have their federal student debts erased after ten years of timely payments.
In 2013, the Consumer Financial Protection Bureau calculated that approximately 25% of American workers would qualify.
Millions of borrowers, however, ran into obstacles after receiving inaccurate information about the program’s requirements from their servicers. Individuals often discovered that since they were involved in a payment plan that was not covered by the program or because they had a debt, part or all of their eligible payments didn’t count.
The Biden administration has made an effort to stop the practice of borrowers being denied relief due to technicalities. People can now reapply for relief and have their eligibility widened as long as they continue to work in the public sector and pay off their debt.
As a result, the debt of almost 790,000 public employees has been eliminated, providing relief of more than $57 billion.
Borrowers can obtain the employer certification form and a list of participating employers through the PSLF assistance portal.
Borrowers who attended questionable quality institutions, those who qualified for the Borrower Defense Loan Discharge, and those who were disabled under the Total and Permanent Disability Discharge received the remaining $138 billion in loan forgiveness.
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